Keeping track of all your business expenses will allow you to offset the cost of business essentials against your Corporation Tax bill, so you can save a little money while you spend it.
When you put an expense through the business, as long as it is an allowable expense, you can offset 20% of the expense against your Corporation Tax. In essence, your Corporation Tax bill will be reduced by an amount that is equivalent to 20% of the expense.For example, if you incur a business expense of £100, your Corporation Tax bill will be reduced by £20.The Corporation Tax deduction is not applied until the end of your Corporation Tax period so you may have to wait a number of months before you can realise the benefit. However, not all business expenses are what is termed allowable or deductible. A business expense is any expenditure that is a wholly, exclusively and necessary expense incurred by the business for its performance of day-to-day duties.